Shocks and Transitions from Career Jobs to Bridge Jobs and Retirement: A New Approach

Abstract

This research provides new empirical evidence on late-life labor market activities of American households from a new survey implemented under the Vanguard Research Initiative. The survey features following innovations: It measures detailed job characteristics not only of a career job but also of post-career bridge jobs; it examines reasons of leaving a career job and whether households would have changed their decisions under counterfactual situations; it examines post-career job search behavior of households. The research finds that, even though a direct transition from a career job to full retirement is still the most common pattern, a significant fraction of older Americans reveal interest in working beyond the career job. Within this sample of older Americans with positive financial assets, 38% of had a post-career bridge job and another 7% of them looked for a post-career employment opportunity. Low health or bad business conditions were the not the main reason for leaving the career job. Yet, for the minority of those who did leave career jobs owing to low health or bad economic conditions, had they counterfactually had better health or economic conditions, they likely would have decided to work longer. Those who work longer on their career job or have a post-career bridge job tend to work fewer hours, have a flexible schedule, and receive lower hourly wages.

Keywords: older workers, retirement transitions